Archives for February 2016

Paris to promote lifting of anti-Moscow sanctions by summer – French economy minister

In January French Economy Minister Emmanuel Macron said the country would make every effort to promote the lifting of anti-Moscow sanctions. But the announcement raised serious doubts among experts.

“It’s still unclear what the words ‘make efforts’ stand for. They might be successful and might fail. But it was clear that France is eager to ban Russian producers using the names ‘champagne’, ‘cognac’ and ‘calvados’,” the Vice-president of Russia’s non-commercial association of business Natlia Zolotyh told Gaztea.ru.

“I don’t know how Paris can affect the lifting of sanctions. I think they just decided to seize the moment,” said Igor Bukharov, the president of federation of restaurant-keepers and hoteliers. He added that the disputed terms do not misinform Russian consumers, as they do not associate the beverage with any geographical area.

The Russian federal service for intellectual property Rospatent plans to thoroughly analyze the alcohol market and possible introduce a ban. “After the in-depth study we’ll be able to say whether the Russian alcohol market is ready to give up using the generic terms for product description,” said the watchdog’s deputy director Lubov Kiry. The possible effect on the economy hasn’t been estimated yet.

According to the current agreement between Moscow and Paris, champagne, cognac and calvados exported from Russia are labeled as ‘sparkling wine’, ‘brandy’ and ‘fortified cider’. Producers are using original generic terms in Cyrillic only for the home market; however France is demanding a ban on that as well.

Article source: https://www.rt.com/business/333143-france-russia-champagne-label/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Moscow and Warsaw to work out transportation deal – Polish Ministry

Russian and Polish truck drivers have been stuck at border crossings since the previous agreement expired on January 31. Polish trucks were allowed to leave Russia up until February 15.

“Yesterday Polish and Russian experts reviewed the transitional period and discussed permits for that period which expires on April 15,” Schmitt said on Friday, adding the sides are to meet again.

The Russian Transport Ministry had complained Warsaw was refusing to put forward a new deal on cargo permits for this year.  

“Today we will continue negotiations that are important not just in terms of transportation but also for Russia’s and Poland’s economies,” Schmidt said.

According to the Polish Association of International Carriers, on average 600 trucks from Poland enter Russia daily, each of them could earn up to €2,500 per day.

Statistics from the International Trade Centre show that last year Poland was eleventh among Russia’s foreign trade partners. Russia exported $9 billion worth of goods to Poland in the first eleven months of 2015. Imports from Poland to Russia (mostly consumer goods) were worth $3.7 billion in the same period, compared with $6.6 billion in 2014.

Russia is facing a similar problem with Ukraine. Kiev has stopped Russian trucks from entering its territory after Moscow blocked the transit of Ukrainian trucks. Russia said it was responding to Kiev’s failure to deal with Ukrainian nationalists who were stopping Russian trucks from travelling through the western and northern regions of Ukraine.  

The Russian Transport Ministry said trucking between Russia and Ukraine could be resumed on February 20.

Article source: https://www.rt.com/business/333000-russia-poland/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Former VimpelCom CEO Jo Lunder arrested in Norway

The settlement includes $167 million to the US Securities and Exchange Commission (SEC), $230 million for the US Department of Justice (DOJ), and $397 million to the Dutch Public Prosecution Service (OM).

In November the Russian mobile phone provider said it had put aside $900 million for litigation costs while awaiting the outcome of the investigation.

“VimpelCom made massive revenue in Uzbekistan by paying over $100 million to an official with significant influence over top leaders of the Uzbek government,” said Andrew Ceresney, director of the SEC’s enforcement division.

Vimpelcom’s CEO Jean-Yves Charlier said resolving the claims against the company was its top priority. “While this has been a very challenging experience for our business and our employees, we are pleased to have now reached settlements with the authorities. The wrongdoing, which we deeply regret, is unacceptable,” he said.

Last year, the Amsterdam-registered VimpelCom and another Russian mobile operator MTS were accused under the US Foreign Corrupt Practices Act of paying more than $114 million to a relative (presumably the daughter) of Uzbek president Islam Karimov between 2006 and 2012 for mobile phone licenses and frequencies.

READ MORE: US seeks seizure of $1bn in assets of telcos operating in Russia

VimpelCom sets aside $900mn for bribery investigation

A former head of VimpelCom Jo Lunder was detained in Norway last November. The arrest was linked to the VimpelCom investigation though Lunder had already left after 15 years with the firm.

VimpelCom’s $795 million penalty is the second largest under the US Foreign Corrupt Practices Act.

The largest fine of $800 million was paid by Siemens in 2008. The German firm was linked to bribery in a number of countries, including Russia. In 2014 France’s Alstom was fined $772 million for corrupt contracts in Indonesia.

In recent years, investigations by US authorities have expanded outside the country’s borders. Suspected illegal use of US dollars anywhere in the world is enough justification for regulators to begin inquiries. Deutsche Bank is currently facing an investigation over possible money laundering in Russia after US currency was used in suspicious transactions.

Article source: https://www.rt.com/business/332967-vimpelcom-penalty-bribery-charges/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The safety agency had recommended aircraft not enter Crimea airspace because of the territorial dispute between Russia and Ukraine. Russia is in control of Crimea and considers it part its own territory. However, Ukraine is the only acknowledged country with authority over the region’s airspace.

Australian firm accused of ‘selling out’ for wanting to run tours to Crimea

In 2015, Kiev asked for a partial lifting of the flight ban, but the EASA initially said it wasn’t fully convinced about flight safety. Even though air traffic control in Crimea complies with the Russian aviation authorities, the resumed flights will be controlled by Kiev which can then charge airlines for its services over the territory of the peninsula.

In March 2014, Crimea’s mostly ethnic Russian population voted to secede from Ukraine and join Russia.

The referendum hasn’t been recognized by the West which regards the Crimean secession as Russian annexation. Along with accusing Moscow of direct military involvement in the conflict in Eastern Ukraine, the US and the EU introduced political and economic sanctions against Russian state-owned banks, defense and oil companies, as well as individuals. The EU imposed restrictions on the supply of weapons and military equipment to Russia as well as military technology, dual-use technology, hi-tech equipment and technology for oil production.

Russia has denied military involvement in Ukraine and has responded by imposing an embargo on agricultural products, food and raw materials from countries that joined anti-Russian sanctions.

Article source: https://www.rt.com/business/332862-crimea-flights-ukraine-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“I take responsibility for it,” said Maduro.

Caracas has hiked petrol prices for the first time in 20 years, as the oil-dependent Venezuelan economy is no longer able to subsidize its cost at the pumps, selling gasoline to its citizens for next to nothing.

Crude exports account for 95 percent of Venezuela’s revenues. Since mid-2014 oil prices have fallen over 70 percent, slashing the nation’s income dramatically.

Yet even the pending fuel price hike will still allow Venezuelans to fill their tanks relatively cheaply.

Starting from February 18, the price of premium gasoline is going rise from 0.1 bolivars (less than 2 cents) a liter to 6 bolivars (87 cents) per liter; an increase of over 6,000 percent. The price for regular 91 octane gasoline is set to jump from 0.07 bolivars (1 cent) to 1 bolivar (14 cents) per liter, reports the Associated Press.

The government has also announced a devaluation of the bolivar against the US dollar. The official exchange rate used for basic consumer goods such as food and medicine is going devalue the national currency from 6.3 to 10 bolivars to the greenback.

At the same time the black market exchange rate in Venezuela has fallen below 1,000 bolivars per dollar. That explains why a beer in the country can cost 300 bolivars and a basket of strawberries fetches 800 bolivars.

Maduro has made it clear the additional revenues will be channeled to fulfilling the government’s social obligations such as education, health services and housing. The programs were launched by his predecessor, the late Hugo Chávez, who put Venezuela on the socialist path 17 years ago.

“We must charge for gasoline,” Maduro said. “I ask that the people welcome and support this new change.”

The last gasoline price hike in Venezuela ended with uncontrollable violence. The 1989 adoption of austerity measures, including a hike in petrol prices, ended with a wave of riots in the capital that left hundreds dead.

“This is a necessary measure, a necessary action to balance things, I take responsibility for it,” the president stressed during a five-hour televised speech he made to announce and explain the measures to the nation.

He also announced a 20 percent increase in the minimum wage, coming into effect on March 1.

Thousands rally in Venezuela in support of new parliament (PHOTOS, VIDEOS)

Maduro, who has only had about a 20 percent approval rating for most of his term, is battling for his political life after the opposition seized control of Congress in January for the first time in over a decade. Now opposition leaders place all the blame for chronic goods shortages, empty store shelves and growing inflation on the socialist president.

Opposition lawmakers are ready to do whatever it takes to remove Maduro from office, from shortening his term to organizing a presidential recall referendum, which requires collecting 4 million signatures from the voters.

If the referendum takes place, Maduro’s opponents would have to get more votes against the president than he got during the 2013 presidential election.

The opposition’s two-time presidential candidate and most popular politician Henrique Capriles, the author of the anti-Maduro referendum initiative, believes the government would have to recognize the results of the vote, should they be favorable for the opposition.

Article source: https://www.rt.com/business/332846-venezuela-petrol-price-hike/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

WTI futures in New York also saw a reverse in earlier losses, gaining as much as 6.3 percent, according to Bloomberg.

On Wednesday, Tehran expressed its support for the plan to freeze oil production levels, which was put forward by Russia and Saudi Arabia a day earlier.

After meeting with energy ministers from other top crude oil producers, Iran’s Oil Minister Bijan Namdar Zanganeh said the country supported the measures that aim to prevent a further drop in oil prices.

Iran backs the proposal, Iranian Shana news agency reported. However, the minister did not specify whether Tehran would curb its own crude production.

Tehran holds key to crude production freeze

Following the Moscow-Riyadh output agreement, Zanganeh met with his counterparts from Iraq, Qatar and Venezuela in the Iranian capital. He assessed the meeting as being positive.

“We had a good meeting today and the report of yesterday’s meeting was given to us. We support cooperation between OPEC and non-OPEC members,” the minister told Iranian media on Wednesday, Reuters reported.

“I was told that Russia as the world’s biggest oil producer, Oman and other countries are ready to join. This is a positive step, we have a positive approach to it, this is a good start,” Zanganeh added, without mentioning Tehran’s specific plans.

With three OPEC members – Qatar, Venezuela and Kuwait – already having said they are ready to freeze output at January levels, and the UAE saying it’s open to cooperation, the fate of the initiative now mostly depends on Iran’s participation.